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Housing crisis solutions far from reach

EMILY BOURKE: The latest national projections put the shortfall in dwellings at close to 500,000 within a decade.

The New South Wales Government moved this week to offer big cash incentives for first home buyers in the hope that construction will take off.

While the Victorian Government announced plans to create six new suburbs on Melbourne's outskirts for housing developments.

But construction is falling woefully short of demand.

So, what are the solutions and can they really work?

For more I spoke to Chris Johnson from the Urban Taskforce, Ruth Spielman from the National Growth Areas Alliance which represents 25 of the nation's fastest growing municipalities and Angela Spinney from the Australian Housing and Urban Research Institute.

Chris Johnson, you speak on behalf of developers, is the housing crisis real?

CHRIS JOHNSON: Well, it certainly is in New South Wales. The figures are pretty depressing in New South Wales compared to Victoria and to Queensland; about half the production of Victoria and about three-quarters the production of Queensland on a per capita basis.

Now, so New South Wales desperately needs some action and I suspect the whole country is reeling a little bit from the financial problems around the world.

EMILY BOURKE: Ruth Spielman, you're from the National Growth Areas Alliance which represents some of the fastest growing municipalities across Australia; what are the priorities and what are the problem areas policy wise?

RUTH SPIELMAN: The priorities are really making sure that there is sufficient infrastructure and services to support the growing populations. So we like to think about it as affordable living in the outer suburbs which includes not only housing but all of the things that go with it.

EMILY BOURKE: Angela Spinney, you have done research for the Australian Housing and Urban Research Institute and there seems to be a shortage of more than half a million affordable homes for low income renters in places where they want to live. Most of those areas are occupied by higher income groups, what can government do?

ANGELA SPINNEY: What we really need to see from government is an acceptance that housing everyone fairly in society is a responsibility of all of us as citizens, not just a policy of self-reliance where we all have to rely on ourselves. We are not in a situation at the moment where the poorest members of our society can provide their own housing without help.

EMILY BOURKE: Chris Johnson, we had this week in New South Wales the state budget announcing first homeowner grants, first homebuyer grants. Is there any evidence to suggest that this will only serve to jack up prices?

CHRIS JOHNSON: I don't think so. I think this is going to encourage supply. But basically in a free market it depends on supply and people need to be able to produce products that people want to purchase. If they produce them at a price that's above the threshold that people can pay for, it's not going to happen.

And this is what's been happening in New South Wales a fair bit. The cost of housing has been going up too much, and partly through organisations like councils and state governments saying' well look, you guys need to carry along with all your costs, you are just greedy developers somehow, all these costs of infrastructure.' But all it does is pass it back to the purchaser and at a price that they can't afford.

We really need to free up the supply of housing and I think there are two parts to this. There's a fringe, growth area, green field approach to housing. But I increasingly, certainly in Sydney, a more urban infill and very much apartment-driven approach to housing as well.

EMILY BOURKE: But there is resistance at a council level to those sorts of developments, isn't there?

CHRIS JOHNSON: Well, there is indeed and the Productivity Commission last year did a very detailed research on planning across the whole country. And they did some surveys about attitudes of communities about growth change, new densities, and in Melbourne I think 52 per cent were against this sort of happening; in Hobart 36 per cent; but in Sydney 64 per cent of the community did not want change, did not want a move to new densities. And I think this has created …

EMILY BOURKE: So what's the solution?

CHRIS JOHNSON: … well, it 's created a culturally problem whereby if councils are going to be representing their communities, if two-thirds of them don't want change we have a dilemma. Tet we've got immigration at a national level adding 180,000 or so each year and approximately 50,000, 60,000 end up in Sydney. Population is increasing, birth rates; we've got aims for 600,000 new houses by the next 20 years; so we actually have to get that occurring.

ANGELA SPINNEY: Can I just come in there because I'm interested in what Chris was saying about the first homebuyers grant because actually the research that AHURI (Australian Housing and Urban Research Institute) has done for instance, does seem to show that where first homebuyers grants are provided, what it actually does is increase the price of housing. So that money that is paid by taxpayers just ultimately goes to developers. It doesn't actually achieve anything in terms of making housing more affordable.

And also I just wanted to come back on the point that Chris was saying about that we seem to be expanding and growing out and out into these fringe growth areas; living there is not cheaper, it's much more expensive. And we see more mortgage default, for instance, in those outer fringe areas where people are trying to balance mortgage with the heavy travel and living costs that Ruth has brought up. And as a result we see people going into mortgage arrears and people being pushed further and further out.

So certainly we would not encourage an urban sprawl. I think it is very much a matter of education of people, that as Chris just mentioned, people - a generation is coming up where they are trading off one renting rather than buying and also leaving nearer to the inner-city rather than in the urban sprawl. So I think we are seeing a gentle change of attitudes but I think there is a lot that government and local authorities can do to promote a higher density of living in our metropolitan cities in Australia because after all we do live in some of the most low density cities in the world.

We are exceptional here. How we live here is not the norm, and we're paying the consequences of living abnormally at the moment.

CHRIS JOHNSON: I mean I think the 64 per cent negativity to change in Sydney is because we are probably a bit more advanced in a move to apartment living and denser living. But I think our political leaders need to understand that as we move from a more low density spread out, suburban model to a more dense form of living - which can be well-designed and close to work and all sorts of other amenities, coffee shops and things - there is going to be a community tension as change occurs. But we need to be strong and carry that through.

Just on the issue that Angela raised about the first homeowners grant, what the treasurer has done in New South Wales is made this from the first of October only apply to new housing. And it's a direct stimulus for a housing industry that is on its knees. And I know it is easy to say it just goes into the developers pockets and they make money; we've had three major developers go bankrupt over the last few months - Kell and Rigby, Reed and now St Hilliers - and leaving subcontractors, people all out of work and losses of money everywhere.

EMILY BOURKE: At the other end of the spectrum we've got the public housing issue, and state governments say it is no longer sustainable. There are new statistics from the Queensland Government that 15 per cent of public housing stock is under-occupied.

Angela Spinney, what are the solutions here?

ANGELA SPINNEY: So what we are seeing is a move in some states towards looking at transferring some of those properties to other forms of social housing such as housing associations so that those organisations can go to the open market.

But coming back to your point Emily, I don't actually think that asking people to leave their properties when we can see that they are under-occupying is necessarily a good idea. What that often means is that we have people in public housing that's family-sized, they've brought their families up. These are people who are now entering retirement age, most of them are not working anyway to be honest.

So where are they going to go? If we now say to them ok you are in a three-bed house but the kids have grown up and left home; where are we going to put them? We can't ask them to leave public housing in order to re-enter the homelessness system. One that would be incredibly unethical and secondly, it would incredibly expensive.

We have already talked about the incredible shortages in the other tenures in private rental, in owner-occupation, which they are not going to be able to afford to get into anyway. So I really believe that asking people to have their housing reviewed at different stages of their lives rather than just saying right, now you are in public housing this is yours for life and you can get on with the rest of your life and not have to worry about anymore.

I really feel that just asking them to be re-assessed all the time is not the solution.

EMILY BOURKE: Ruth Spielman, are your members talking about public housing?

RUTH SPIELMAN: Well, our interest is a diversity of housing which Chris touched on before so …

EMILY BOURKE: And are developers actively doing that? Are you getting salt and pepper as they say, developments that include public/private housing arrangements?

RUTH SPIELMAN: Not as great a diversity as we'd like although that has improved over recent years. So we are getting more diversity than we used to but further diversity can still occur, and I think there are opportunities in those green fields areas in the outer suburbs to innovate.

EMILY BOURKE: Chris Johnson, is there a moral obligation on the part of developers to facilitate public housing developments?

CHRIS JOHNSON: Well there is, but if you put too many constraints on any investor and into a market like housing, it's going to be better for them to put their money into the shares or into banks or whatever. We need to just be careful I think of just thinking that the developer can take more and more hits. There have been some very interesting developments in Sydney with Bekdon and other groups from Melbourne, in fact, looking at Bonnyrigg, about private/public partnership approach to mixing up what were very big estates singly about social housing to get a mixture of private and public. And what that has done is lifted the quality of building product and housing across the whole area.

Another one in Riverwood is a similar one where the private sector is coming in to - ff there are 500 current housing units, we are going to end up with 1,500, and 1,000 of them will be for private sector and 500 for social housing. And it has two benefits: it improves the quality of all that stock but it also mixes up the developments in a kind of more socially interesting way, I think, to get a better outcome.

EMILY BOURKE: Angelina Spinney, is there a social stigma attached to those sorts of developments?

ANGELA SPINNEY: Oh, I'm absolutely all for mixed developments. I don't think it's good for any of us, for human beings to live in a community where everybody is just like us, whoever us is and whoever we are. I'm all for people living in mixed communities.

If you think of human beings, we were kind of designed to build, to live at the kind of village level, if you like, where there's a mix of old people, young people, people with different interests and things. So the more that we can create communities like that, we know that we'll do our bit to excluding less people and including more people into a mixed society.

EMILY BOURKE: Chris, the forecasts aren't good, the projections aren't good. Is there hope on the horizon?

CHRIS JOHNSON: Oh, of course there is. I mean there's been a shortfall, certainly in New South Wales and I think in most parts of Australia in terms of housing production, driven a bit by the GFC (global financial crisis) it's obviously had a fair impact on investment into many areas. I think the industry is starting to pick up again but there are a number of impediments and part of it, certainly in New South Wales, is a planning issue that councils with communities who are not wanting change, make it very difficult to get change to occur. So we are calling for the open taskforce, for stronger leadership from the state government. And in fact in the budget last Tuesday, they did set up a new urban renewal authority called Urban Growth New South Wales, which we've been calling for, to take stronger roles, particularly in inner urban areas.

A lot of people I think are now preferring to live closer to the action and that's good because that's closer to jobs as well, less public trans… or less vehicular transport used, maybe more public transport. And so these are areas that I think need to be really encouraged. But the state government needs to take a strong role to get these developments occurring.

I mean we launched, the other day, a project about the Parramatta Road link, Sydney to Parramatta - nine different councils, different planning rules, different heights, different floor space all the way along there. We said someone needs to coordinate, because it's a rundown area, to get this to be rejuvenates with a new type of housing.

We said 100,000 apartments and 100,000 jobs. So our mantra is every time we have new housing we need the same number of jobs.

EMILY BOURKE: Chris Johnson from the Urban Taskforce, Ruth Spielman from the National Growth Areas Alliance and Angela Spinney from the Australian Housing and Urban Research Institute; thank you so much for your time.

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